European Stocks Rise With Italy Bonds; U.S. Futures Gain

By Stephen Kirkland & Glenys Sim

European stocks rose to a one-week high as trading resumed after a four-day weekend while Italian and Spanish bond yields declined. U.S. equity-index futures advanced before a report on factory orders.

The Stoxx Europe 600 Index (SXXP) climbed 0.9 percent at 9 a.m. in New York in the first day of trading after the gauge rallied 5 percent in the first quarter. The Cyprus General Market Index (CYSMMAPA) fell 2.6 percent after a two-week closure. Standard & Poor’s 500 Index futures added 0.4 percent. Italy’s 10-year rate fell nine basis points to 4.67 percent, while Spain’s yield slid seven basis points to 4.99 percent. Sweden’s krona strengthened against all but one of its 16 major peers after the nation’s manufacturing industry grew for a second month. U.K. natural gas slumped 16 percent. Cyprus government officials will seek easier bailout terms in talks with representatives of the European Union andInternational Monetary Fund today. Spain’s unemployment fell in March and a committee named by Italian President Giorgio Napolitano started work negotiating a new government. U.S. factory orders probably rebounded in February, economists said before a Commerce Department report today after data yesterday showed manufacturing grew less than forecast.

“The second quarter has started firmly, picking up the strong momentum from the first three months of the year,” Richard Hunter, head of U.K. equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “Some optimism ahead of the impending first-quarter corporate updates on both sides of the Atlantic may be tempered by the ongoing need to keep a close eye on developments in Cyprus.”

Vodafone Climb

Three shares gained for each one that fell in the Stoxx 600. Vodafone Group Plc rallied 5 percent to a five-year high as the Financial Times’s Alphaville blog reported that AT&T Inc. and Verizon Communications Inc. are working on a joint offer for the mobile-phone company, citing unidentified people. Verizon and AT&T declined to comment, according to Alphaville.

The Cyprus General Market Index slid on its first day of trading since March 15. Hellenic Bank Pcl, the nation’s third- largest bank, plunged 20 percent to the lowest price since at least 1996.

Trading in Cypriot equities had been halted as the country faced a banking crisis and ejection from the euro. Shares in Cyprus Popular Bank Pcl and Bank of Cyprus Pcl, which make up 60 percent of the benchmark gauge’s weighting, will remain suspended until April 15, according to statement posted on the Cyprus Stock Exchange’s website.

BGC Jumps

The gain in S&P 500 futures indicated the U.S. gauge will rebound from yesterday’s 0.5 percent drop. BGC Partners Inc. jumped 50 percent in pre-market New York trading as Nasdaq OMX Group Inc. said it will buy eSpeed, BGC’s electronic trading system for U.S. Treasuries, for about $750 million in cash.

A report at 10 a.m. New York time may show U.S. factory orders rose 2.9 percent in February after a 2 percent drop the previous month, according to the median forecast in a Bloomberg survey of economists.

The yield on 10-year Treasuries rose two basis points to 1.85 percent and the rate on German bunds added one basis point to 1.30 percent. Two-year Spanish note yields sank 14 basis points to 2.30 percent.

The MSCI Emerging Markets Index (MXEF) slid 0.1 percent as trading resumed in Hong Kong and most European markets. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong lost 0.8 percent and the Shanghai Composite Index fell 0.3 percent. Russia’s Micex Index slipped 0.2 percent and India’s Sensex climbed 0.9 percent. The Philippine Stock Exchange Index retreated 1.3 percent, the biggest percentage loss in Asia, after valuations rose to an all-time high.

North Korea

South Korea’s Kospi index slipped 0.5 percent and the won weakened 0.3 percent against the dollar. North Korea said it will restart all facilities at its Yongbyon nuclear site, including a uranium enrichment plant and a graphite-rod reactor mothballed since 2007, the official Korean Central News Agency said.

The krona strengthened 0.6 percent versus the dollar and advanced 0.7 percent per euro. An index based on responses from about 200 Swedish purchasing managers rose to a seasonally adjusted 52.1 in March from 50.9 the previous month, Stockholm- based Swedbank AB, which compiles the index, said today. A reading above 50 indicates growth. The median estimate of seven economists surveyed by Bloomberg was for a reading of 50.6.

The cost of insuring against losses on Slovenia sovereign debt climbed for a seventh day amid speculation it will become the next euro-region nation to ask for a bailout. Credit-default swaps on the country’s bonds rose 18 basis points to 372, the highest since Oct. 4.

Corn advanced 1.2 percent in Chicago after tumbling 13 percent the past two days. U.K. natural gas’s decline was the biggest slump since Feb. 13.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net;

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